The government is to phase out the 18 percent preferential savings rate for retired public-sector employees over a period of six years, Vice President Chen Chien-jen (陳建仁) said yesterday.
In a radio interview, Chen said that the government plans to lower the 18 percent interest rate in stages over six years.
For people taking monthly retirement payments, the rate will be adjusted to 9 percent in the first two years after retirement, then to 6 percent in years three and four and 3 percent in years five and six. There would be no preferential interest rate after that, he said.
Photo: courtesy of Super FM98.5
However, to care for less-well-off retirees, the 18 percent preferential rate would remain for people below a salary floor, which is to be set at either NT$25,000 or NT$32,000 (US$791 or US$1,013) a month, pending further discussions, he said.
Pensioners who take a lump sum would be entitled to higher interest rates, Chen said, without specifying the rate.
The 18 percent preferential interest rate for retired military officials, civil servants and public-school teachers was introduced in 1960 when the average income for the three professions was lower than most other careers.
The government originally planned to scrap the preferential rate, but has decided to take a milder approach, Chen said.
“A pension [fund] is like a feeble goose, which has to lay eggs larger than it can handle every day. There will be no more eggs when it cannot stand anymore and dies,” Chen said. “However, a healthy goose that only has to lay normal-sized eggs can continue [to survive] and give birth to goslings.”
Under the pension system, the pension of a person who begins work at 25 and retires at 55 is only enough to cover 10 years of pension payments, Chen said.
By the age of 65, the person would be receiving pension payments covered by others’ contributions, he said.
With a retirement age of 50, due to the nation’s average life expectancy, women can expect to receive pension payments for 33 years and men for 27 years.
To ensure a sustainable pension system, the retirement age needs to be set at 55 and the income replacement ratio lowered from 80 percent to 60 percent, with the pension contributions of employees and the government raised from 12 percent to 18 percent, Chen said.
Meanwhile, amid accusations that the government has not been transparent in its organization of a national conference on pension reform, which is to be held on Sunday at the Presidential Office Building, Chen said the Presidential Office is always “fair and honest.”
Calling on opponents of the government’s pension reform plans to express their opinions at the conference peacefully, Chen said opponents have mobilized protesters in a “warlike fashion,” which is inappropriate conduct in a democratic society.
Although invited to attend the conference, the Chinese Nationalist Party (KMT), the New Party and the Taiwan Solidarity Union have yet to nominate representatives, Chen said, encouraging the parties to participate.
PROVOCATIVE: Chinese Deputy Ambassador to the UN Sun Lei accused Japan of sending military vessels to deliberately provoke tensions in the Taiwan Strait China denounced remarks by Japan and the EU about the South China Sea at a UN Security Council meeting on Monday, and accused Tokyo of provocative behavior in the Taiwan Strait and planning military expansion. Ayano Kunimitsu, a Japanese vice foreign minister, told the Council meeting on maritime security that Tokyo was seriously concerned about the situation in the East China and South China seas, and reiterated Japan’s opposition to any attempt to change the “status quo” by force, and obstruction of freedom of navigation and overflight. Stavros Lambrinidis, head of the EU delegation to the UN, also highlighted South China Sea
SILENCING CRITICS: In addition to blocking Taiwan, China aimed to prevent rights activists from speaking out against authoritarian states, a Cabinet department said The Ministry of Foreign Affairs (MOFA) yesterday condemned transnational repression by Beijing after RightsCon, a major digital human rights conference scheduled to be held in Zambia this week, was abruptly canceled due to Chinese pressure over Taiwanese participation. This year’s RightsCon, the world’s largest conference discussing issues “at the intersection of human rights and technology,” was scheduled to take place from tomorrow to Friday in Lusaka, and expected to draw 2,600 in-person attendees from 150 countries, along with 1,100 online participants. However, organizers were forced to cancel the event due to behind-the-scenes pressure from China, the ministry said, expressing its “strongest condemnation”
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, said it expects its 2-nanometer (2nm) chip capacity to grow at a compound annual rate of 70 percent from this year to 2028. The projection comes as five fabs begin volume production of 2-nanometer chips this year — two in Hsinchu and three in Kaohsiung — TSMC senior vice president and deputy cochief operating officer Cliff Hou (侯永清) said at the company’s annual technology symposium in Silicon Valley, California, last week. Output in the first year of 2-nanometer production, which began in the fourth quarter of last year, is expected to
Taiwan’s economy grew far faster than expected in the first quarter, as booming demand for artificial intelligence (AI) applications drove a surge in exports, spilling over into investment and consumption, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. GDP growth was 13.69 percent year-on-year during the January-to-March period, beating the DGBAS’ February forecast by 2.23 percentage points and marking the most robust growth in nearly four decades, DGBAS senior official Chiang Hsin-yi (江心怡) told a news conference in Taipei. The result was powered by exports, which remain the backbone of Taiwan’s economy, Chiang said. Outbound shipments jumped 51.12 percent year-on-year to
RSS